Thursday, November 01, 2007

Bad Day At The Office

The Dow plunged 362 points on Thursday. The banking sector had its worst day in half a decade. The Fed desperately wants a reason to continue cutting interest rates, but knows doing so would likely send the price of oil well into the triple digits, cause a catastrophic run on the dollar, and drive gold over $1000. Now, all this may happen anyway. But if it happens after more Fed rate cuts, the reason for those cuts must be manifestly good enough to shield the Fed from criticism about those consequences. Until that reason comes along, the Fed is trapped. When the Fed feels trapped, you can be sure the White House does as well. Expect the rhetoric, and possibly the actions, to reflect that more and more.

"Power is not a means, it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power. "George Orwell

Kind of sums this administration in a nutshell-pun intended. Funny how Orwell seems to cut through the BS and get to the point, also funny how many use his words on both sides to forward their arguments but fail to really read them, Orwell's point on political speech